Income Tax Act 2007

If you need more information about this Act, please contact the administering agency: Inland Revenue Department
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RD 7 Extra pay
  • Meaning

    (1) An extra pay

    • (a) means a payment that—

      • (i) is made to a person in connection with their employment; and

      • (ii) is not a payment regularly included in salary or wages payable to the person for a pay period; and

      • (iii) is not overtime pay; and

      • (iv) is made in 1 lump sum or in 2 or more instalments; and

    • (b) includes a payment of the kind described in paragraph (a) made—

      • (i) as a bonus, gratuity, or share of profits; or

      • (ii) as a redundancy payment; or

      • (iii) when the person retires from employment; or

      • (iv) as a result of a retrospective increase in salary or wages, but only to the extent described in subsection (2); and

    • (c) includes an amount of income that a person derives under section CE 9 (Restrictive covenants) or CE 10 (Exit inducements) if the income is derived in connection with an employment relationship between the person and the person who paid the amount; and

    • (d) does not include a payment of exempt income.

    Limit on retrospective increase in salary or wages

    (2) A payment described in subsection (1)(b)(iv) is included in extra pay only to the extent to which,—

    • (a) it accrues from the start of the increase until the start of the first pay period in which the increase is included in salary or wages; and

    • (b) when a week ends with a Saturday, the total of the increase for the week, and of the salary or wages for the week excluding the increase, and of any other salary or wages that the person earns for the week, is more than $4.

    Defined in this Act: amount, employment, exempt income, income, pay, pay period, salary or wages,

    Compare: 2004 No 35 s OB 1 extra pay